Slides
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earnings conference call second quarter fiscal 2025 — May 1, 2025
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2 — Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Ashland has identified some of these forward-looking statements with words such as “anticipates,” “believes,” “expects,” “estimates,” “is likely,” “predicts,” “projects,” “forecasts,” “objectives,” “may,” “will,” “should,” “plans” and “intends” and the negative of these words or other comparable terminology. Ashland may from time to time make forward-looking statements in its annual reports, quarterly reports and other filings with the U.S. Securities and Exchange Commission (SEC), news releases and other written and oral communications. These forward-looking statements are based on Ashland’s expectations and assumptions, as of the date such statements are made, regarding Ashland’s future operating performance, financial, operating cash flow and liquidity, as well as the economy and other future events or circumstances. These statements include but may not be limited to statements with respect to Ashland’s anticipations and expectations regarding the financial impact of its cost reduction and manufacturing optimization initiatives; the future pricing environment; favorable absorption; the cost of raw materials; its ability to drive sustainable growth and create long-term value; its portfolio optimization initiatives and accelerated cost savings programs; its exposure to current and future tariff and global trade policies; and management’s expectations and beliefs regarding Ashland’s adjusted fiscal-year 2025 outlook. Ashland’s expectations and assumptions include, without limitation, internal forecasts and analyses of current and future market conditions and trends, management plans and strategies, operating efficiencies and economic conditions (such as prices, supply and demand, cost of raw materials, and the ability to recover raw-material cost increases through price increases), and risks and uncertainties associated with the following: the impact of acquisitions and/or divestitures Ashland has made or may make (including the possibility that Ashland may not realize the anticipated benefits from such transactions); Ashland’s substantial indebtedness (including the possibility that such indebtedness and related restrictive covenants may adversely affect Ashland’s future cash flows, results of operations, financial condition and its ability to repay debt); severe weather, natural disasters, public health crises, cyber events and legal proceedings and claims (including product recalls, environmental and asbestos matters); the effects of announced or future tariff increases; the effects of the ongoing Ukraine/Russia and Israel/Hamas conflicts on the geographies in which we operate, the end markets we serve and on our supply chain and customers, and without limitation, risks and uncertainties affecting Ashland that are described in Ashland’s most recent Form 10-K (including Item 1A Risk Factors) filed with the SEC, which is available on Ashland’s website at http://investor.ashland.com or on the SEC’s website at http://www.sec.gov. Various risks and uncertainties may cause actual results to differ materially from those stated, projected or implied by any forward-looking statements. Ashland believes its expectations and assumptions are reasonable, but there can be no assurance that the expectations reflected herein will be achieved. Unless legally required, Ashland undertakes no obligation to update any forward-looking statements made in this news release whether as a result of new information, future events or otherwise. Regulation G: Adjusted Results The information presented herein regarding certain unaudited adjusted results does not conform to generally accepted accounting principles in the United States (U.S. GAAP) and should not be construed as an alternative to the reported results determined in accordance with U.S. GAAP. Ashland has included this non-GAAP information to assist in understanding the operating performance of the company and its reportable segments. The non-GAAP information provided may not be consistent with the methodologies used by other companies. All non-GAAP information has been reconciled with reported U.S. GAAP results under Appendix B: Non-GAAP Reconciliation of this presentation.
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3 — agenda o Q2 performance summary o Q2 financial results o business unit reviews o strategic priorities o tariffs overview & mitigation o outlook o Q&A
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4 Guillermo Novo, Chair and CEO Q2 performance summary
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5 — Q2 highlights1 1 Comparisons versus prior-year quarter. All figures are presented on an adjusted basis except Sales. Appendix B reconciles adjusted amounts to amounts reported under GAAP, including reconciliations of net income to EBITDA and adjusted EBITDA, operating income to adjusted operating income, income from continuing operations to adjusted income from continuing operations, diluted earnings per share to adjusted diluted earnings per share and adjusted diluted earnings per share, excluding amortization expense. 2 Unless otherwise noted, earnings are reported on a diluted-share basis and exclude amortization expense. sales (-) portfolio optimization, lower carry-over pricing from FY24 actions, organic sales volumes (17) % $479 MM adjusted EBITDA % +60 bps 22.5 % (+) portfolio optimization; sequential recovery with increased sales & production volumes adjusted EPS2 (22) % $0.99 (-) reduced income from continuing operations; (+) 1.5 million shares repurchased in Q2 adjusted EBITDA (14) % $108 MM (-) portfolio optimization, lower carry-over pricing, (+) lower SARD & production costs
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6 — 33% 30% 19% 5% 23% life sciences personal care specialty additives intermediates Ashland delivering strong margin1 expansion amid softer demandpeak portfolio optimization impact 1 Adjusted EBITDA margin. Portfolio reset items: nutraceuticals, CMC, MC and Avoca portfolio optimization actions, shown for illustrative purposes and does not represent amounts reported under GAAP. See Appendix A for additional detail. Some totals may not add due to rounding. 2 Merchant sales represents ~70% of Intermediates. peak optimization: foundation for profitable growth sales comparisons versus prior-year quarter 2 2 sales comparisons versus reset1 prior-year quarter +290 bps +350 bps +220 bps (2,460) bps +60 bps +40 bps +280 bps +240 bps +30 bps comparisons versus prior-year quarter comparisons versus prior-year reset1 quarter -23% -14% -15% -8% -17% -4% -5% -9% -5% -30% -25% -20 % -15% -10% -5% 0% life sciences personal care specialty additives intermediates Ashland 2
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7 Q2 financial results and business unit reviews
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8 — fiscal-second quarter adjusted results1 ($US in millions, except percentages) Q2 FY25 Q2 FY24 change Q2 FY24 change sales $479 $575 (17) % $508 (5) % gross profit margin 34.7 % 32.9 % +180 bps SG&A / R&D costs / intangible amortization $106 $117 (9) % operating income $60 $72 (17) % EBITDA $108 $126 (14) % $113 (4) % EBITDA margin 22.5 % 21.9 % +60 bps 22.2% +30 bps EPS (excluding acquisition amortization)3 $0.99 $1.27 (22) % ongoing free cash flow4 ($6) $4 NM Ashland adjusted results summary1 1 All figures are presented on an adjusted basis except Sales. Appendix B reconciles adjusted amounts to amounts reported under GAAP, including reconciliations of net income to EBITDA and adjusted EBITDA, operating income to adjusted operating income, income from continuing operations to adjusted income from continuing operations, diluted earnings per share to adjusted diluted earnings per share and adjusted diluted earnings per share, excluding amortization expense. 2 Portfolio reset items: nutraceuticals, CMC, MC, Avoca portfolio optimization actions, shown for illustrative purposes and does not represent amounts reported under GAAP. See Appendix A for additional detail. Some totals may not add due to rounding. 3 Unless otherwise noted, earnings are reported on a diluted-share basis. 4 Ongoing free cash flow defined as total cash flow provided by operating activities, less adjustments to property, plant and equipment and excluding any inflows or outflows related to U.S. and Foreign Accounts Receivable Sales Program, restructuring-related payments and environmental and related litigation payments. reset results2
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9 — life sciences ($US in millions, except percentages) Q2 FY25 Q2 FY24 change Q2 FY24 change sales $172 $222 (23) % $180 (4) % gross profit $70 $83 (16) % gross profit margin 40.7 % 37.4 % +330 bps operating income $43 $50 (14) % EBITDA $56 $66 (15) % $58 (3) % EBITDA margin 32.6 % 29.7 % +290 bps 32.2% +40 bps Q2 FY25 year-over-year sales vs. reset2 (HSD/MSD/LSD = high, mid or low single-digit %. DD = double-digit %) 1 All figures are presented on an adjusted basis except Sales. Appendix B reconciles adjusted amounts to amounts reported under GAAP, including reconciliations of net income to EBITDA and adjusted EBITDA, operating income to adjusted operating income. 2 Portfolio reset items: nutraceuticals, CMC, MC and Avoca portfolio optimization actions, shown for illustrative purposes and does not represent amounts reported under GAAP. See Appendix A for additional detail. Some totals may not add due to rounding. adjusted results summary1 highlights o broad sequential pharma market recovery & share gains; across most regions & technologies o nutrition share gains o lower pharma pricing from carry-over FY24 actions; in- line with expectations o lower production cost o nutraceuticals divestiture & low-margin nutrition exits: ($42MM) sales & ($8MM) EBITDA u +LSD+LSD pharma nutrition & other +LSD-MSD reset results2 no change+LSD
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10 — intermediates ($US in millions, except percentages) Q2 FY25 Q2 FY24 change sales $37 $40 (8) % gross profit $1 $11 (91) % gross profit margin 2.7 % 27.5 % (2,480) bps operating income ($1) $9 (111%) EBITDA $2 $12 (83) % EBITDA margin 5.4 % 30.0 % (2,460) bps adjusted results summary1 highlights o captive: lower pricing & stable volume o merchant: broadly lower pricing & higher volume o lower production volumes u merchant captive 1 All figures are presented on an adjusted basis except Sales. Appendix B reconciles adjusted amounts to amounts reported under GAAP, including reconciliations of net income to EBITDA and adjusted EBITDA, operating income to adjusted operating income. 2 No portfolio reset items for intermediates business unit. Q2 FY25 year-over-year sales vs. reset2 (HSD/MSD/LSD = high, mid or low single-digit %. DD = double-digit %) -DDno change
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11 — personal care highlights o ongoing soft demand in Europe o LSD organic volume growth in core skin care & hair care o customer-specific weakness in biofunctional actives o unfavorable oral care order timing; normalizing this year o avoca divestiture & low- margin exits: ($15MM) sales & ($3MM) EBITDA skin care hair care oral care, household +DD+LSD -HSD ($US in millions, except percentages) Q2 FY25 Q2 FY24 change Q2 FY24 change sales $146 $169 (14) % $154 (5) % gross profit $64 $64 (-) % gross profit margin 43.8 % 37.9 % +590 bps operating income $27 $25 +8 % EBITDA $44 $45 (2) % $42 +5 % EBITDA margin 30.1 % 26.6 % +350 bps 27.3% +280 bps adjusted results summary1 reset results2 1 All figures are presented on an adjusted basis except Sales. Appendix B reconciles adjusted amounts to amounts reported under GAAP, including reconciliations of net income to EBITDA and adjusted EBITDA, operating income to adjusted operating income. 2 Portfolio reset items: nutraceuticals, CMC, MC and Avoca portfolio optimization actions, shown for illustrative purposes and does not represent amounts reported under GAAP. See Appendix A for additional detail. Some totals may not add due to rounding. Q2 FY25 year-over-year sales vs. reset 2 (HSD/MSD/LSD = high, mid or low single-digit %. DD = double-digit %) -LSD-HSD
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12 — specialty additives u coatings construction, energy, performance spec. +MSD highlights o anticipated China coatings volume declines & continued highly competitive intensity in Middle East, Africa & India o coatings volume recovery in North America & Europe o continued strong demand in performance specialties o lower coatings pricing from carry-over FY24 actions; in-line with expectations o production: higher volumes & lower spend o construction exits: ($10MM) sales & ($2MM) EBITDA impact -HSD ($US in millions, except percentages) Q2 FY25 Q2 FY24 Change Q2 FY24 change sales $134 $157 (15) % $147 (9) % gross profit $31 $31 (-) % gross profit margin 23.1 % 19.7 % +340 bps operating income $10 $10 (-) % EBITDA $26 $27 (4) % $25 +3 % EBITDA margin 19.4 % 17.2 % +220 bps 17.0% +240 bps adjusted results summary1 reset results2 1 All figures are presented on an adjusted basis except Sales. Appendix B reconciles adjusted amounts to amounts reported under GAAP, including reconciliations of net income to EBITDA and adjusted EBITDA, operating income to adjusted operating income. 2 Portfolio reset items: nutraceuticals, CMC, MC and Avoca portfolio optimization actions, shown for illustrative purposes and does not represent amounts reported under GAAP. See Appendix A for additional detail. Some totals may not add due to rounding. Q2 FY25 year-over-year sales vs. reset 2 (HSD/MSD/LSD = high, mid or low single-digit %. DD = double-digit %) -HSD
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13 Guillermo Novo, Chair and CEO strategic priorities and outlook
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14 — execute: drive near-term performance multi-year cost savings ahead of $20MM FY25 target at ~$24MM execute $30 million restructuring plan reset cost structure and eliminate stranded cost identified ~$30MM ~$18MM FY25 realization several high-impact execution initiatives underway to deliver $90 million in savings through FY27 FY25 target key updates $60 million manufacturing optimization strengthen HEC & VP&D competitive position; enable share gains VP&D / intermediates & small plant consolidation ~$6MM FY25 realization 2 3 ~$90 MM EBITDA impact1 1 incremental impact by FY27 divest avoca business line focus Ashland strategy; complete pharmachem exit closed on March 141 ~$15MM ~$5MM complete
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15 — globalize & innovate: YTD financial progress +$20 million incremental FY25 sales target $(6) million sales decline fiscal year-to-date +$10 million incremental FY25 sales target +$5 million incremental sales fiscal year-to-date target progress target progress innovate good start across business units; FY25 on track globalize strong fundamentals buffer year-over-year decline and regional / customer weakness on track on track~$100 MM revenue impact1 ~$100 MM revenue impact1 1 incremental impact by FY27
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16 — tariff overview1 & mitigation plans tariff response plan • low direct raw material exposure: • localized sourcing mitigates US/China tariff impact • anticipate $3 to $5MM 2H headwind1, $5 - $7MM annually • minimal US finished good imports: • limited finished good imports except EU • majority of imports currently tariff-exempt1 • annual unmitigated/unexempted exposure: $4 to $6MM • manageable US exports to China: • assessing ~$70MM in annual China sales • company average gross profit • ASH is sole supplier for one-third of GP • inventory on hand generally covers Q3 • relative competitive positioning • share gain opportunities • optimizing production, sourcing & logistics • intercompany trading strategies • customer & vendor negotiations; pricing • agile pricing strategies agile operations for tariff response building resilience across scenarios 1 Subject to change. Based on tariffs enacted as of April 30 2025. Life SciencesPersonal Care Specialty Additives US exports to China
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17 — strategic priorities • accelerating restructuring & productivity gains • sustain innovate momentum • navigating customer-specific globalize weakness tariffs • including estimated direct financial impact of global trade policies forward looking insights •risks & opportunities • European & Chinese economic recovery • competitive intensity from Chinese overcapacity & exports • trade policy & stimulus • raw material cost volatility • foreign exchange fluctuations fiscal full-year outlook sales: $1.825 - $1.9 billion adj. EBITDA: $400 - $420 million key market factors • tariff impact & uncertainty; weakening consumer sentiment, particularly coatings • stable European market (no recovery yet) • modest FY25 intermediates recovery • China: down as-expected; aggressive export activity continues in MEAI • stable raw material costs, ex tariff impact pharma architectural coatings skin hairoral nutrition other consumer industrial 1 FY24 sales adjusted for portfolio reset. Portfolio reset items: nutraceuticals, CMC, MC Avoca portfolio optimization actions. See appendix A for additional detail end- markets1 revising FY25 outlook
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18 — our strategic priorities execute globalize innovate invest business unit focus enterprise focus global trade
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19 — upcoming innovation day event topics o innovation focus o in-depth review of latest technical developments o details and examples on expanding value proposition & commercial opportunities live / webcast Thursday, May 29, 2025, at 9 am ET from Bridgewater, NJ structure o CEO, CTO and BU leadership remarks o moderated Q&A sessions o lab tour with platform application demonstrations showcasing enhanced capabilities & expanded applications of our technology platforms
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20 Guillermo Novo, Chair and CEO closing comments
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21 — summary focused portfolio: resilient markets, differentiated products, scalable growth leadership in high-quality consumer markets high-impact controllable actions drive profitability step change scalable growth platforms & sustainable competitive advantage robust cash flow generation and proven track record of disciplined capital allocation stable, high-margin growth driven by mission-critical additives ~12% EBITDA CAGR +550 bps return on net assets >$800MM cumulative FCF EBITDA CAGR ~12% EBIT CAGR ~25% FY241 – 27 financial KPIs execute globalize innovate invest 1 2024 financials adjusted for portfolio reset. Portfolio reset items: nutraceuticals, CMC, MC & Avoca portfolio optimization actions. See appendix A and B for additional detail
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22 — thank you Q&A
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23 appendix A: adjusted results summary and balance sheet
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24 — sales reset detail sales ($US in millions) life sciences personal care specialty additives intermediates total FY 2024 reported $810 $634 $572 $97 $2,113 portfolio reset impact1 (130) (10) (24) -- (164) FY 2024 portfolio reset 680 624 548 97 1,949 avoca exit -- (55) -- -- (55) FY 2024 portfolio reset with avoca $680 $569 $548 $97 $1,894 portfolio optimization impact ($US in millions) Q1 Q2 Q3 Q4 total life sciences $(41) $(42) $(32) $(15) $(130) personal care (2) (5) (1) (2) (10) specialty additives (7) (10) (3) (4) (24) quarterly portfolio reset impact 1 (50) (57) (36) (21) (164) avoca exit -- (10) (17) (17) (44) quarterly portfolio reset with avoca $(50) $(67) $(53) $(38) $(208) 1. Portfolio reset items: nutraceuticals, CMC, MC portfolio optimization actions
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25 — adjusted EBITDA reset detail adj. EBITDA ($US in millions) life sciences personal care specialty additives Intermediates unallocated total FY 2024 reported $230 $164 $99 $42 $(76) $459 portfolio reset impact1 (24) (2) (4) -- -- (30) FY 2024 portfolio reset 206 162 95 42 (76) 429 avoca exit -- (15) -- -- (15) FY 2024 portfolio reset with avoca $206 $147 $95 $42 $(76) $414 portfolio optimization impact ($US in millions) Q1 Q2 Q3 Q4 total life sciences $(8) $(8) $(5) $(3) $(24) personal care -- (1) -- (1) (2) specialty additives -- (2) (1) (1) (4) quarterly portfolio reset impact 1 (8) (11) (6) (5) (30) avoca exit -- (2) (7) (6) (15) quarterly portfolio reset with avoca $(8) $(13) $(13) $(11) $(45) 1. Portfolio reset items: nutraceuticals, CMC, MC portfolio optimization actions 2. Calculation of adjusted EBITDA for each period presented have been reconciled within certain financial filings with the SEC and posted on Ashland's website for each reportable segment.
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26 — Q2 adjusted results summary1 1 All figures are presented on an adjusted basis except Sales and Diluted share count (million shares). Appendix B reconciles adjusted amounts to amounts reported under GAAP, including reconciliations of net income to EBITDA and adjusted EBITDA, operating income to adjusted operating income, income from continuing operations to adjusted income from continuing operations, diluted earnings per share to adjusted diluted earnings per share and adjusted diluted earnings per share, excluding amortization expense. ($US in millions, except percentages and per share data) Q2 FY25 Q2 FY24 change sales $479 $575 (17) % gross profit $166 $189 (12) % gross profit margin 34.7 % 32.9 % +180 bps SG&A / R&D costs / intangible amort. $106 $117 (9) % operating income $60 $72 (17) % depreciation & amortization $49 $56 (13) % EBITDA $108 $126 (14) % EBITDA margin 22.5 % 21.9 % +60 bps net interest and other expense $14 $11 +27 % effective tax rate 25 % 19 % +600 bps income from continuing operations $33 $48 (31) % income from continuing operations (excluding intangible amortization) $46 $64 (28) % diluted share count (million shares) 47 51 (8) % EPS (excluding intangible amortization) $0.99 $1.27 (22) %
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27 — Q2 business unit consolidation1 ($US in millions, except percentages) life sciences personal care specialty additives Intermediates intercompany eliminations2 unallocated and other3 Ashland sales $172 $146 $134 $37 ($10) - $479 gross profit $70 $64 $31 $1 - - $166 gross profit margin 40.7 % 43.8 % 23.1 % 2.7 % - - 34.7 % EBITDA $56 $44 $26 $2 - ($20) $108 EBITDA margin 32.6 % 30.1 % 19.4 % 5.4 % - - 22.5 % 1 All figures are presented on an adjusted basis except Sales. Appendix B reconciles adjusted amounts to amounts reported under GAAP, including reconciliations of net income to EBITDA and adjusted EBITDA, operating income to adjusted operating income, income from continuing operations to adjusted income from continuing operations and diluted earnings per share to adjusted diluted earnings per share. 2 Intercompany sales from intermediates to all other segments recorded at market pricing and are eliminated in consolidation. 3 Unallocated and other includes legacy costs plus corporate governance (finance, legal, executive, etc.).
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28 — liquidity and net debt 1 Total liquidity of $714 million from all sources. 2 Term SOFR benchmark rate to include 10 bps credit adjustment spread on USD 1-, 3-, and 6-month borrowings. 3 Includes $11 million of debt issuance cost discounts as of March 31, 2025. ($US in millions) expiration interest rate Moody’s rating S&P rating 3/31/25 balance cash $168 revolver availability 546 cash and revolver availability1 $714 US and foreign A/R sales program1 - debt 2.00% notes (EUR) Jan. 2028 2.000% Ba1 BB+ $541 3.375% notes Sept. 2031 3.375% Ba1 BB+ 450 6.875% notes May 2043 6.875% Ba1 BB+ 282 6.50% junior subordinated notes Jun. 2029 6.500% B1 BB+ 70 revolving credit facility2 July 2027 Term SOFR+137.5 - - 50 other3 - - - (7) total debt Ba1/stable BB+/stable $1,386 cash (168) net debt $1,218
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29 — $0.15 $0.26 $0.33 $0.42 $0.61 $0.67 $0.74 $0.76 $0.87 $0.98 $1.08 $1.10 $1.18 $1.31 $1.49 $1.60 $1.62 - 0.20 0.40 0.60 0.80 1.00 1.20 1.40 1.60 1.80 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 LTM strong balance sheet & capital allocation strategy 1 All figures as of March 31, 2025 2 Ongoing free cash flow defined as total cash flow provided by operating activities, less adjustments to property, plant and equipment and excluding any inflows or outflows related to U.S. and Foreign Accounts Receivable Sales Program, restructuring-related payments and environmental and related litigation payments. 3 Calendar year dividend payments. Dividends prior to June 15, 2017 are adjusted for the Valvoline separation. 4 CAGR = Compound annual growth rate from December 31, 2009 – December 31, 2024 strong balance sheet1 o cash and liquidity available of ~$0.7 billion o net debt of $1,218 million; net leverage of 2.8x o no long-term debt maturities for the next two years healthy ongoing free cash flow2 generation o prudent production; inventory stable fiscal-year-to-date o typical cash flow seasonality in Q2, ($6) million o LTM ongoing free cash flow2 of $167 million share repurchases under $1 billion authorization o $520 million remains under the current authorization o Q2 repurchases of $100 million / ~1.5 million shares other long-term capital allocation priorities o moderate YoY capex decline; FY25 target = ~$105 million o increased flexibility to pursue future M&A strategy o net investing proceeds of $27 million during the quarter from Avoca sale and excess land sales annual dividend3 increase every year since 2009strong balance sheet and balanced capital allocation
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30 appendix B: non-GAAP reconciliation1 1 Although Ashland provides forward looking guidance for adjusted EBITDA in this presentation, Ashland is not reaffirming or provi ding forward-looking guidance for U.S. GAAP reported financial measures or a reconciliation of forward -looking non-GAAP financial measures to the most directly comparable U.S. GAAP measure because it is unable to predict with reasonable certainty the ultimate outcome of certain significant items without unreasona ble effort.
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31 — Ashland Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data for the 12 Months Ended March 31, 2025 1 Quarterly totals may not add to annual amounts due to rounding. Calculation of adjusted EBITDA for each period presented have been reconciled within certain financial filings with the SEC and posted on Ashland's website for each reportable segment. ($ millions, except pecentages) Sales1 Q2 25 Q1 25 Q4 24 Q3 24 Total Q2 24 Life Sciences 172 134 192 195 693 222$ Personal Care 146 134 162 175 617 169 Specialty Additives 134 115 144 150 543 157 Intermediates 37 33 36 36 142 40 Less: Intercompany Eliminations (10) (11) (12) (12) (45) (13) Total 479$ 405$ 522$ 544$ 1,950$ 575$ Adjusted EBITDA Adjusted EBITDA1 Q2 25 Q1 25 Q4 24 Q3 24 Total Margin Q2 24 Life Sciences 56$ 28$ 56$ 59$ 199$ 28.7% 66$ Personal Care 44 30 47 51 172 27.9% 45 Specialty Additives 26 13 29 38 106 19.5% 27 Intermediates 2 6 10 9 27 19.0% 12 Unallocated (20) (16) (18) (18) (72) (24) Total 108$ 61$ 124$ 139$ 432$ 22.2% 126$
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32 — Ashland Inc. and Consolidated Subsidiaries Segment Components of Key Items for Applicable Income Statement Captions – for the 3 months ended March 31, 2025 In millions - preliminary and unaudited ($ millions) OPERATING INCOME (LOSS) Operating key items: Accelerated depreciation $ (13) $ - $ - $ - $ - $ (13) Restructuring, separation and other costs - - - - (8) (8) Other plant optimization costs (2) (1) (3) - - (6) Environmental reserve adjustments - - - - (2) (2) Held for sale depreciation and amortization - 2 - - - 2 Avoca impairment and sale - - - - 8 8 Income on divestitures, net - - - - 10 10 All other operating income (loss) 43 27 10 (1) (19) 60 Operating income (loss) 28 28 7 (1) (11) 51 NET INTEREST AND OTHER EXPENSE (INCOME) Key items (3) (3) All other net interest and other expense 14 14 11 11 OTHER NET PERIODIC BENEFIT LOSS 1 1 INCOME TAX EXPENSE (BENEFIT) Tax effect of key items (a) (2) (2) Tax specific key items (b) (1) (1) All other income tax expense 12 12 9 9 INCOME (LOSS) FROM CONTINUING OPERATIONS $ 28 $ 28 $ 7 $ (1) $ (32) $ 30 Life Sciences Specialty Additives Three Months Ended March 31, 2025 Intermediates Unallocated & Other TotalPersonal Care (a) Represents the tax effect of the key items that are previously identified above. (b) Represents key items resulting from tax specific financial transactions, tax law changes or other matters that fall within the definition of tax specific key items. See slides 38 and 39 for additional information.
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33 —($ millions) Ashland Inc. and Consolidated Subsidiaries Segment Components of Key Items for Applicable Income Statement Captions – for the 3 months ended March 31, 2024 In millions - preliminary and unaudited OPERATING INCOME (LOSS) Operating key items: Accelerated depreciation $ - $ - $ (27) $ - $ - $ (27) Restructuring, separation and other costs - - - - (20) (20) Environmental reserve adjustments - - - - (3) (3) Other plant optimization costs - - (1) - - (1) All other operating income (loss) 50 25 10 9 (22) 72 Operating income (loss) 50 25 (18) 9 (45) 21 NET INTEREST AND OTHER EXPENSE (INCOME) Key items (9) (9) All other net interest and other expense 11 112 2 OTHER NET PERIODIC BENEFIT LOSS 2 2 INCOME TAX EXPENSE (BENEFIT) Tax effect of key items (a) (10) (10) Tax specific key items (b) (105) (105) All other income tax expense 11 11() () INCOME (LOSS) FROM CONTINUING OPERATIONS $ 50 $ 25 $ (18) $ 9 $ 55 $ 121 TotalPersonal Care Intermediates Specialty Additives Unallocated & Other Three Months Ended March 31, 2024 Life Sciences (a) Represents the tax effect of the key items that are previously identified above. (b) Represents key items resulting from tax specific financial transactions, tax law changes or other matters that fall within the definition of tax specific key items. See slides 38 and 39 for additional information.
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34 — Ashland Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data – Free Cash Flow and Adjusted Operating Income for the 3 and 6 Months Ended March 31, 2025 and 2024 ($ millions) Free cash flows Total cash flows provided (used) by operating activities from continuing operations $ 9 $ 54 $ (21) $ 255 Adjustments: Additions to property, plant and equipment (21) (34) (44) (70) Free Cash Flows $ (12) $ 20 $ (65) $ 185 Cash (inflows) outflows from U.S. Accounts Receivable Sales Program(a) 4 (7) 11 (15) Cash (inflows) outflows from Foreign Accounts Receivable Sales Program(b) (21) (20) (9) (122) Restructuring-related payments(c) 14 4 17 7 Environmental and related litigation payments(d) 9 7 13 15 Ongoing Free Cash Flow $ (6) $ 4 $ (33) $ 70 Net income (loss) $ 31 $ 120 $ (135) $ 147 Adjusted EBITDA(e) $ 108 $ 126 $ 169 $ 197 Operating Cash Flow Conversion(f) 29% 45% 173% Ongoing Free Cash Flow Conversion(g) -6% 3% -20% 36% (a) Represents activity associated with the U.S. Accounts Receivable Sales Program impacting each period presented. (b) Represents activity associated with the Foreign Accounts Receivable Sales Program impacting each period presented. (c) Restructuring payments incurred during each period presented. (d) Represents cash outflows associated with environmental and related litigation payments which will be reimbursed by the Environmental tr (e) See Adjusted EBITDA reconciliation. (f) Operating Cash Flow Conversion is defined as Cash flows provided (used) by operating activities from continuing operations divided by Ne (g) Ongoing Free Cash Flow Conversion is defined as Ongoing free cash flow divided by Adjusted EBITDA Adjusted Operating Income Operating income (loss) (as reported) $ 51 $ 21 $ (128) $ 4 Key items, before tax: Avoca impairment and sale (8) - 175 - Income on divestitures, net (10) - (10) - Accelerated depreciation 13 27 13 49 Restructuring, separation and other costs 8 20 11 24 Other plant optimization costs 6 1 9 1 Environmental reserve adjustments 2 3 3 7 Argentina currency devaluation impact - - - 5 Held for sale depreciation and amortization (2) - (2) - Adjusted Operating Income (non-GAAP) $ 60 $ 72 $ 71 $ 90 Six months ended 2025 2024 Three months ended 2025 2024 March 31 March 31 Not meaningful 2025 2024 Three months ended 2025 2024 March 31 March 31 Six months ended
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35 — Ashland Inc. Reconciliation of Non-GAAP Data – Adjusted EBITDA for the 3 Months Ended March 31, 2025 and 2024 ($ millions) Adjusted EBITDA - Ashland Inc. Net income $ 31 $ 120 Income tax expense (benefit) 9 (104) Net interest and other expense 11 2 Depreciation and amortization (a) 49 56 EBITDA 100 74 Loss (income) from discontinued operations, net of income taxes (1) 1 Operating key items (see slides 32 & 33) 9 51 Adjusted EBITDA $ 108 $ 126 Three months ended March 31 2025 2024 (a) Depreciation and amortization excludes accelerated depreciation expense of $13 million for Life Sciences for the three months ended March 31, 2025, which is included as a key item within this table as a component of Adjusted EBITDA. Depreciation and amortization includes $2 million for Personal Care associated with the Avoca business assets for the three months ended March 31, 2025, which is included as a key item within this table as a component of Adjusted EBITDA. Depreciation and amortization excludes accelerated depreciation expense of $27 million for Specialty Additives for the three months ended March 31, 2024, which is included as a key item within this table as a component of Adjusted EBITDA.
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36 — Life Sciences and Personal Care Reconciliation of Non-GAAP Data – Adjusted EBITDA for the 3 Months Ended March 31, 2025 and 2024 ($ millions) Adjusted EBITDA - Life Sciences Operating income $ 28 $ 50 Add: Depreciation and amortization (a) 13 16 Operating key items (see slides 32 & 33) 15 - Adjusted EBITDA $ 56 $ 66 Adjusted EBITDA - Personal Care Operating income $ 28 $ 25 Add: Depreciation and amortization (a) 17 20 Operating key items (see slides 32 & 33) (1) - Adjusted EBITDA $ 44 $ 45 Three months ended March 31 2025 2024 (a) Depreciation and amortization excludes accelerated depreciation expense of $13 million for Life Sciences for the three months ended March 31, 2025, which is included as a key item within this table as a component of Adjusted EBITDA. Depreciation and amortization includes $2 million for Personal Care associated with the Avoca business assets for the three months ended March 31, 2025, which is included as a key item within this table as a component of Adjusted EBITDA. Depreciation and amortization excludes accelerated depreciation expense of $27 million for Specialty Additives for the three months ended March 31, 2024, which is included as a key item within this table as a component of Adjusted EBITDA.
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37 — Specialties Additives and Intermediates Reconciliation of Non-GAAP Data – Adjusted EBITDA for the 3 Months Ended March 31, 2025 and 2024 ($ millions) Adjusted EBITDA - Specialty Additives Operating income (loss) $ 7 $ (18) Add: Depreciation and amortization (a) 16 17 Operating key items (see slides 32 & 33) 3 28 Adjusted EBITDA $ 26 $ 27 Adjusted EBITDA - Intermediates Operating income (loss) $ (1) $ 9 Add: Depreciation and amortization 3 3 Adjusted EBITDA $ 2 $ 12 Three months ended March 31 2025 2024 (a) Depreciation and amortization excludes accelerated depreciation expense of $13 million for Life Sciences for the three months ended March 31, 2025, which is included as a key item within this table as a component of Adjusted EBITDA. Depreciation and amortization includes $2 million for Personal Care associated with the Avoca business assets for the three months ended March 31, 2025, which is included as a key item within this table as a component of Adjusted EBITDA. Depreciation and amortization excludes accelerated depreciation expense of $27 million for Specialty Additives for the three months ended March 31, 2024, which is included as a key item within this table as a component of Adjusted EBITDA.
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38 — Ashland Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data – Adjusted Income from Continuing Operations for the 3 and 6 Months Ended March 31, 2025 and 2024 ($ millions) Income (loss) from continuing operations (as reported) $ 30 $ 121 $ (136) $ 149 Key items, before tax: Avoca impairment and sale (8) - 175 - Unrealized (gain) loss on securities (3) (9) 14 (39) Accelerated depreciation 13 27 13 49 Restructuring, separation and other costs 8 20 11 24 Other plant optimization costs 6 1 9 1 Environmental reserve adjustments 2 3 3 7 Loss on pension and other postretirement plan remeasurements - - 1 - Argentina currency devaluation impact - - - 5 Held for sale depreciation and amortization (2) - (2) - Income on divestitures, net (10) - (10) - Key items, before tax 6 42 214 47 Tax effect of key items(a) (2) (10) (52) (12) Key items, after tax 4 32 162 35 Tax specific key items: Uncertain tax positions (3) - (4) - Other and tax reform related activity 2 (105) 11 (129) Tax specific key items(b) (1) (105) 7 (129) Total key items 3 (73) 169 (94) Adjusted Income from Continuing Operations (non-GAAP) $ 33 $ 48 $ 33 $ 55 Amortization expense adjustment (net of tax)(c) 13 16 27 33 Adjusted Income from Continuing Operations (non-GAAP) Excluding Intangibles Amortization Expense $ 46 $ 64 $ 60 $ 88 2025 2024 Six months ended 2025 2024 Three months ended March 31 March 31 (a) Represents the tax effect of the key items that are previously identified above. (b) Represents key items resulting from tax specific financial transactions, tax law changes or other matters that fall within the definition of tax specific key items. These tax specific key items included the following: - Uncertain tax positions: Includes the impact from the settlement of uncertain tax positions with various tax authorities. - Other and tax reform: Includes the impact from the remeasurement of foreign deferred tax balances resulting from the impact from rate changes for foreign jurisdictions and other tax law changes enacted during fiscal 2025 and 2024. (c) Amortization expense adjustment (net of tax) tax rates were 21% for the three and six months ended March 31, 2025 and 20% for the three and six months ended March 31, 2024
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39 — Ashland Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data – Adjusted Diluted EPS from Continuing Operations for the 3 and 6 Months Ended March 31, 2025 and 2024 Diluted EPS from continuing operations (as reported) $ 0.63 $ 2.40 $ (2.91) $ 2.92 Key items, before tax: Avoca impairment and sale (0.17) - 3.73 - Unrealized (gain) loss on securities (0.06) (0.18) 0.31 (0.76) Accelerated depreciation 0.28 0.55 0.28 0.96 Restructuring, separation and other costs 0.17 0.39 0.23 0.47 Other plant optimization costs 0.13 0.02 0.19 0.02 Environmental reserve adjustments 0.04 0.06 0.06 0.14 Loss on pension and other postretirement plan remeasurements - - 0.02 - Argentina currency devaluation impact - - - 0.10 Held for sale depreciation and amortization (0.04) - (0.04) - Income on divestitures, net (0.21) - (0.21) - Key items, before tax 0.14 0.84 4.57 0.93 Tax effect of key items(a) (0.04) (0.20) (1.11) (0.23) Key items, after tax 0.10 0.64 3.46 0.70 Tax specific key items: Uncertain tax positions (0.06) - (0.08) - Other and tax reform related activity 0.04 (2.07) 0.23 (2.54) Tax specific key items(b) (0.02) (2.07) 0.15 (2.54) Total key items 0.08 (1.43) 3.61 (1.84) Adjusted Diluted EPS from Continuing Operations (non-GAAP) $ 0.71 $ 0.97 $ 0.70 $ 1.08 Amortization expense adjustment (net of tax)(c) 0.28 0.30 0.56 0.63 Adjusted Diluted EPS from Continuing Operations (non-GAAP) Excluding Intangibles Amortization Expense $ 0.99 $ 1.27 $ 1.26 $ 1.71 Three months ended Six months ended March 31 March 31 2024 2025 20242025 (a) Represents the tax effect of the key items that are previously identified above. (b) Represents key items resulting from tax specific financial transactions, tax law changes or other matters that fall within the definition of tax specific key items. These tax specific key items included the following: - Uncertain tax positions: Includes the impact from the settlement of uncertain tax positions with various tax authorities. - Other and tax reform: Includes the impact from the remeasurement of foreign deferred tax balances resulting from the impact from rate changes for foreign jurisdictions and other tax law changes enacted during fiscal 2025 and 2024. (c) Amortization expense adjustment (net of tax) tax rates were 21% for the three and six months ended March 31, 2025 and 20% for the three and six months ended March 31, 2024